Bulk materials such as bauxite, elemental sulphur, phosphates, gypsum, limestone, cement, iron ore, iron ore pellets, corn, wheat, and other grains, sugar, coal, lignite, peat, anthracite, waste products, sewage sludge, wood chips and bark, and paper regularly have various characteristics measured, especially during handling or processing. The value of these goods in the United States is enormous. For example, the forest products group, which is in Standard Industrial Class 26, had a total value of shipments in 1986 of about $108 billion. Of this amount pulp mills accounted for $4.1 billion, paper and board mills $42 billion, newspapers $23 billion, corrugated and solid fiber boxes $14 billion, sanitary paper products $11 billion, and sanitary food containers $3 billion. Coal is another bulk material which regularly has various of its characteristics measured, and in 1987 the forecast was for approximately $23 billion of coal to be mined and processed in the United States.
Among other bulk materials, nitrogenous and phosphatic fertilizers account for about $9 billion annually. Primary metals account for $50 to $60 billion and inorganic chemicals about $12 billion. In 1986 there was about $4 billion worth of cement produced in the United States.
Unfortunately in handling and processing some of these bulk materials significant errors arise, especially with respect to their weight, but errors also are found in other characteristics of the products.
As an example, coal is produced in the United States in about 5,000 mines operated by about 3,000 companies. Approximately 85 percent of total coal produced annually in the United States is consumed by the electric utility industry amounting to about $22.9 billion. Electric utility inventories are currently approximately 163 million tons with a nominal value of $5.5 billion.
The electric utility industry writes off up to five percent of inventories annually because of their inability to reconcile the quantities of coal purchased with the quantities burned. This corresponds to an annual write off of this product alone of $273 million. Since coal is essentially nonperishable in the ordinary time frames associated with the commerce of coal, such losses for the most part do not represent physical losses but rather inaccuracies in weighing. In general, weighing errors become increasingly positive with decreasing load. The errors that are experienced therefore tend to be exacerbated by and to the extent that materials handling operations are carried out at less than full capacity.
There are significant economic ramifications far beyond simple inventory corrections. For example, inaccuracies resulting in the overstatement of actual inventories must be compensated for by carrying an increment of extra inventory in order to be safe. The cost of purchase, stocking, interest, and insurance are very real though undefinable lacking more accurate figures. Additional economic ramifications are related to more accurate and timely quality information. The economic impact of forced derating of units and associated purchase of outside power, losses associated with less than ideal economic dispatch, and operation with coal quality better than actually needed to meet air quality regulations are examples. Again, such economic losses cannot easily be estimated lacking more accurate and timely information; however, they are substantial. The same problems arise in the other bulk materials industry which in dollar volume far exceeds that of coal.
There is a substantial need for sampling and weighing at bulk terminals through which bulk materials move, both in import and export markets. The United States produced about $4 billion worth of cement in 1986 and imported cement worth about $300 million. The value of metal and mineral mining shipments in Standard Industrial Classifications 10 and 14, which excludes fuels, was $23 billion in 1986. Imports amounted to $3.2 billion. The coal industry exported 88 million tons with the value estimated to be $3.5 billion.